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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts
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To: Sokka who wrote (81674)9/29/2023 10:36:11 AM
From: Lee Lichterman III1 Recommendation

Recommended By
Sokka

  Read Replies (1) of 97594
 
I'm pretty much the same way but when swing trading, I still sell calls against a long I think will go up. It gives me a little insurance in case I'm early and though it can reduce my profits, it usually isn't too bad.
What I usually do is sell same day or next day calls. I'm usually buying SPY. If my entry is in the morning, I can usually get at least 1.5 for next strike up. That gives me about half a day's move against me if I'm wrong since SPY "usually" moves about 3 points a day.
If it goes up as planned, as time erodes, theta decay helps offset price rise in underlying.
Also, as it goes into the money, the premium drops as intrinsic value goes up.
Depending on my exit target, I'll either exit as planned or roll the option up as needed to another strike one or two days out depending on where the current price is and my planned exit.
I just keep stepping it up until I get out.

I know it doesn't work for everyone but it works for me and gives me a little piece of mind knowing that if it goes against me, the drawdown is usually about half of what it would be in case of unexpected news etc.

I'm already done for the day again. Traded overnight and this morning. Starting to slip up and only made a little on my last trade so don't want to mess up a good day unless I see a good setup later.
I'm expecting a churning day for op ex/end of quarter. Numbers this morning were all good.
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